1. How to Grow
your Savings?
'If you really want your money to grow,
stocks is the only way to go'
SARAL GYAN CAPIITAL SERVIICES
SARAL GYAN CAP TAL SERV CES
www.saralgyan.in
An Independent Equity Research Firm

2. How to Grow your Savings? www.saralgyan.in
CONTENT
PREFACE
INTRODUCTION
HOW TO READ THIS E-BOOK
PART I: VALUE OF MONEY
Inflation ……………………………………………………………………………………………… 10
Past & Future Value of Money……………………………………………………………… 11
PART II: INCOME, EXPENDITURES & SAVINGS
Income Expenditure Ratio…………………………………………………………………… 12
Passive Income …………………………………………………………………………………… 13
Tips & Tricks to Save Money………………………………………………………………… 16
Saving Strategies ………………………………………………………………………………… 18
PART III: SAVING & INVESTING
Difference between Saving & Investing……………………………………………… 20
Understanding Your Assets ………………………………………………………………… 22
Investing in Different Asset class………………………………………………………… 23
Pay Off Your Debt or Invest ………………………………………………………………… 24
Power of Compounding ……………………………………………………………………… 26
Benefits of Long Term Investing ………………………………………………………… 29
10 Key Investing Mantra’s…………………………………………………………………… 31
PART IV: FINANCIAL PLANNING
Financial Planning………….…………………………………………………………………… 34
Managing your Finances……………………………………………………………………… 36
Making your own Investment Plan………………………………………………… 37
Your Investment Profile & Risk Tolerance…………………………………… 39
2

3. How to Grow your Savings? www.saralgyan.in
PART V: BUILDING AN EQUITY PORTFOLIO
Investing in Equities …………………………………………………………………………… 42
Investing in Bull & Bear Market…………………………………………………………… 44
Invest in Individual Stock or Mutual Fund…………………………………………… 46
Creating a Stock Portfolio…………………………………………………………………… 48
Investment Portfolio Mistakes to Avoid ……………………………………………… 51
Importance of Stock Diversification …………………………………………………… 52
Investing for Growth, Yield & Income………………………………………………… 54
Facts & Benefits of Investing in Small Companies……………………………… 56
PART VI: EQUITIES & RISKS
Investing Risks Vs Rewards ………………………………………………………………… 59
Understanding Stock Market Risks….…………………………………………………… 61
Different Type of Investing Risks………………………………………………………… 63
Managing Investment Risks ………………………………………………………………… 65
The Bulls, The Bears & The Farm ……………………………………………………… 67
PART VII: EQUITIES & THE TIME FACTOR
Stock Investing & The Age Factor …………………………………………….………… 69
Don’t Count on Stocks for Short Term Goals ……………………………………… 71
Characteristics of Successful Investors ……………………………………………… 72
Don’t try to Time Bottom of Stock Market ……………………………………… 74
Investing in Stocks for Regular Income & Long Term Growth …………… 76
Investing Checklist – 10 Most Important Element………………………………… 77
3

4. How to Grow your Savings? www.saralgyan.in
PREFACE
Many investors are absolutely fascinated about investing in stock market. But, in our
opinion mere fascination is not enough. Investing wisely and with the right insights
helps one to grow his savings by taking right investment decisions.
If investors do not have the right perspective, investing could be a puzzle. Investors
could go down the wrong path, reaching an unwanted destination.
The purpose of this e-book is to provide all the necessary information so that you
can acquire new skills and expand your knowledge, in order to accomplish profitable
investments in the stock market.
The intention of this e-book is not only to provide advice on investments for
beginners, but also aims to offer fresh ideas for experienced investors.
This e-book does not claim to give tips on particular investments, but rather aims to
provide the reader with the broad, important and useful advice necessary to be
translated into stock market success.
Through this e-book, Saral Gyan team has tried to capture their experience for the
reader’s benefit. The logical and straight forward way in which this e-book is
written and organized will enable the reader to make right investment decisions to
achieve long term goals and securing the future.
We hope it will be an informative and useful read for you.
Wish you always Happy Investing!
- Saral Gyan Team.
4

5. How to Grow your Savings? www.saralgyan.in
INTRODUCTION
“How to Grow your Savings?”
A guide to help you ensure, you get the best returns on your
investments from equities.
This book will provide you important & relevant information supported by facts &
figures to help you grow your savings by investing in stocks to succeed:
Key Mantra’s:
1. Adopt discipline approach for Savings
2. Find out the ways to get passive income
3. Set your financial goals & start Investing
4. Do invest in equities for long term
Getting the most out of this book is simple, “How to
Grow your Savings?” requires practical approach.
Execute your learning experience in your day to day life
by managing your finances effectively and achieve your
long term goals.
Traditionally, Indians are Savers. The savings rate is as high as 30 percent. If not a
direct savings in the bank, the money goes into a fixed deposit, gold or real estate.
That trend might change soon if more people invest in stocks, which have
outperformed every other asset class from 2001 to 2007.
Stocks have outperformed other asset classes by as much as 60 percent, yet
only 3 percent of Indian population directly invests in stocks.
The main reasons for this is a lack of knowledge, awareness as well as unethical
practices by a small minority of participants who encourage regular churning based
on tips and rumours without giving proper financial planning to investors.
If someone invested in a Bank of India fixed deposit account in 2001, he or
she would have an 8 percent return per year. If the same person invested in Bank of
India stock he or she would have a total return of 4,800 percent as the stock rose
from 12 rupees to all time high of 588 rupees in 2010.
5

6. How to Grow your Savings? www.saralgyan.in
Though Indians continue to be underinvested in the stock market there is more
interest coming in from all corners. 200,000 new demat accounts are opened every
month. Recent transparency measures should also bring more people in. The stock
market will no longer be treated as a gamble but will be put on par with real estate
and gold.
The irony is that even though stock markets as a long term asset class have given
the highest returns, short term trading in futures and options has also caused the
maximum losses. The maximum numbers of bankruptcies were caused due to the
stock market crash in 2008-2009 amongst high risk speculative traders.
Power of Investing in Equity Market
Now, Just Imagine...
How much can you make in 30 years by just investing Rs.10,000 initially in any of
financial instruments?
Take a wild guess?
Let us look at the real example.
If you have subscribed for 100 shares of "X" company with a face value of Rs. 100 in
1980.
• In 1981 company declared 1:1 bonus = you have 200 shares
• In 1985 company declared 1:1 bonus = you have 400 shares
• In 1986 company split the share to Rs. 10 = you have 4,000 shares
• In 1987 company declared 1:1 bonus = you have 8,000 shares
• In 1989 company declared 1:1 bonus = you have 16,000 shares
• In 1992 company declared 1:1 bonus = you have 32,000 shares
• In 1995 company declared 1:1 bonus = you have 64,000 shares
• In 1997 company declared 1:2 bonus = you have 1,92,000 shares
• In 1999 company split the share to Rs. 2 = you have 9,60,000 shares
• In 2004 company declared 1:2 bonus = you have 28,80,000 shares
• In 2005 company declared 1:1 bonus = you have 57,60,000 shares
• In 2010 company declared 3:2 bonus = you have 96,00,000 shares
In 2010, you have whopping 9.6 million shares of the company.
Any guess about the company?
(Hint: It’s an Indian IT Company)
Any guess about the present valuation of Rs. 10,000 invested in 1980?
6

7. How to Grow your Savings? www.saralgyan.in
The company which has made fortune of millions is "WIPRO" with present
valuation of 450+ crores (excluding dividend payments) for Rs. 10,000 invested
in 1980.
Unbelievable, isn’t it? But it’s a Fact! Investing in companies with good
fundamentals and proven track record can give far superior returns compared to any
other asset class (real estate, precious metals, bonds etc) in a long run.
Will Wipro provide similar returns in next 30 years? Probably not, it’s already an
IT giant.
You need to explore companies in small and mid cap space with good track
record and stay invested to create wealth in a long term.
It is a garden out there and one need to simply provide sufficient time to grow
his quality seeds to get the fruits. One has to know what he is doing and has to
be cognizant about it. With a little research and patience stock market
investments can yield maximum returns.
So, how will you grow your savings? What are you investing in?
“How to Grow your Savings”
Visit our website www.saralgyan.in to get complete copy of e-book
E-Book Price: Rs. 499 ($ 11.99)
Subscribers can pay online using PayPal services at www.saralgyan.in
Claim your eBook for Free by subscribing to any of our service under
Saral Gyan - Special Diwali Offer of the Year
(Click here to know more about subscription services & special discounts)
Avail attractive savings on subscription during this festive season.
7